Both sentences are grammatically correct. You can say she deserves a prize or she merits a prize. Although, deserve is more often used in colloquial, everyday language., whereas merit is slightly more formal and quite often used in written English.
To merit or to deserve something means you have earned something, that you are worthy of this prize or honour.
The main difference between deserve and merit is that merit can function as a noun and a verb whereas deserve can only function as a verb.
For example:
- He deserves a merit. (correct)
- He deserves a good result. (correct)
- He merits a good result. (correct)
- He merits a deserve. (incorrect)
There can also be a slight difference in meaning between the two words. When we say that a person merits a prize it means that they earned this prize because of their qualification, hard work or skills.
Deserve can have this meaning too but it can also mean that the person received this prize even if they didn’t necessarily earn it or put a lot of hard work into it. If you think of a prince, he deserves to be king once his father dies even if he is unqualified to do so. It doesn’t matter whether he will be a good or a bad king, he still deserves to be king.
Here are some more examples:
- “The team dedicated a lot of time and hard work into this presentation. They merit/deserve a promotion” said the team’s boss.
- The young student has had a tough upbringing but he has always focused on his education through it all. He merits/deserves the scholarship to his dream college.
- The daughter of the millionaire felt like she deserved an inheritance even though they had been estranged for over 20 years.
- Normally after the first six months working for the company, new employees get a raise. Tom thought he deserved this raise after his first six months even though he hadn’t reached any of his monthly targets and was always late for work.
If somebody merits something, they have earned something good like an award or a scholarship. Whereas a person can deserve something good or something bad like a punishment or a bad grade at school.
For example:
- They all knew he merited this award after years of dedication and hard work.
- “The teenager’s fundraiser merits an applause” the proud principal announced at the Monday morning announcement.
- “She deserves to go to prison. She manipulated her partner into doing those terrible things, she’s more dangerous than he is” the prosecutor argued.
- After discovering their son had ditched class, the parents felt he deserved a heavy punishment and grounded him for a month.
